(16-11) Cash Conversion Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35 days, and a payables deferral period of 25 days. Assume that cost of goods sold is 80% of sales. Cycle a. What is the length of the firm's cash conversion cycle? b. If annual sales are $4,380,000 and all sales are on credit, what is the firm's investment in accounts receivable? C. How many times per year does Negus Enterprises turn over its inventory?
(16-11) Cash Conversion Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35 days, and a payables deferral period of 25 days. Assume that cost of goods sold is 80% of sales. Cycle a. What is the length of the firm's cash conversion cycle? b. If annual sales are $4,380,000 and all sales are on credit, what is the firm's investment in accounts receivable? C. How many times per year does Negus Enterprises turn over its inventory?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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